 "Joel Mokyr, Philippe Aghion, Peter Howitt win Nobel Prize in Economics")
The 2025 Nobel Prize in Economic Sciences has been awarded to Joel Mokyr, Philippe Aghion, and Peter Howitt for their work on “innovation-driven economic growth”, the Nobel Committee said on Monday.
Mokyr, a professor at Northwestern University in the US, received half of the prize for identifying the prerequisites of sustained growth through technological progress. The other half, was jointly conferred to French economist Aghion of Collège de France, and Howitt of Brown University for developing the theory of sustained growth through creative destruction.
“Over the last two centuries, for the first time in history, the world has seen sustained economic growth. This has lifted vast numbers of people out of poverty and laid the foundation of our prosperity. This year’s laureates in economic sciences... explain how innovation provides the impetus for further progress,” said The Royal Swedish Academy of Sciences, which is responsible for selecting Nobel laureates in physics, chemistry and economic sciences.
The economics prize is formally known as the Sveriges Riksbank Prize in Economic Sciences and is presented along with other Nobel Prizes on December 10 in Stockholm, Sweden.
Contribution of Joel Mokyr
Economic historian Mokyr, the committee said, “Used historical sources as one means to uncover the causes of sustained growth becoming the new normal.” He stressed that in order for innovations to succeed one another in a self-generating process, it is not enough to know that something works, but understanding the scientific reasons why it works is also essential.
Before the industrial revolution, such explanations were often missing, making it difficult to build on new discoveries and inventions, the committee said.
Contribution of Aghion & Howitt
Meanwhile, Aghion and Howitt developed a mathematical model of ‘creative destruction’, describing it as a process in which new and better products enter the market, causing companies selling older products to lose out, the committee said.
They argued that creative destruction creates conflicts that must be managed in a constructive manner. Otherwise, established companies and interest groups threatened by change can hinder innovation.
John Hassler, chair of the Committee for the prize, said, “The laureates’ work shows that economic growth cannot be taken for granted. We must uphold the mechanisms that underly creative destruction, so that we do not fall back into stagnation,”
Last year, the Nobel Prize in Economic Sciences was awarded to US-based scholars Simon Johnson, James Robinson, and Daron Acemoglu for their research examining how colonisation and the establishment of public institutions help explain why some countries have remained trapped in poverty for decades.